enforcement training center in glencoe, georgia, so that all new hire training is conducted there. that's one way to connect to the larger organization and a sense of culture. takes top level, it somebody at the very top of the organization, and that's mean right now, saying, this is important -- saying the word "culture" out loud and identifying where the culture is not connected, then identifying what you expect that culture to be. i'm about to issue my administrator's intent, in which i very clearly, in a very few sustain pages -- in a few succinct pages outline what our culture is, what i intended to be, and how we intend to work towards that. so, there is a series of efforts that i have planned over the coming months to begin to talk and training the culture that you expect -- top and train culture that you

expect. it takes tenuous attention. this will fade away if you don't pay attention to it. hice: it is a huge task. in the middle of that, you have both safety and the efficiency issue. you mentioned some metrics you are currently implementing. mr. ross and mr. grover, do you believe those metrics are adequate -- mr. roth and mr. grover, you believe those metrics are adequate to provide the safety and security and efficiency we need? i.g. roth: i agree that you get what you measure. it is part of our audit process. 90 days after the completion of our report, we will look back on it in a rigorous, systematic way to determine whether or not these metrics are going to work. until then, we are going to be skeptical about it, because that is our job, to be skeptical. we will keep congress informed as we go forward.

grover: time will tell. our biggest task will be to make sure they put in place a systematic, coherent approach to measuring outcomes that they want to achieve and then monitoring them and following up on them with the workforce, because that's the only way to make sure they get improved. for yournk each of you accountability, working, partnering together. mr. chairman, thank you for the time. i yield back. >> mr. neffenger, let me just say how encouraging it is to hear your forthrightness and also your comments about knowing the root cause and human factors . when we look at human factors, and i talk to people in my studies on human factors in different environments, and all they are learning from narrow signs, one of the things that comes up is making sure those individuals can focus on what their jobs are

. that also reinforces the things you say about culture, that you are trying to eliminate things that are distracting them. individuals are not getting paid a lot of money, but healing in her stressful retail environment, where -- but dealing in a stressful retail environment. i want to ask of your relationship with the airline industry. it strikes me that, having been a frequent traveler for years, going through the experience, you don't go to tsa to find out what's the best way for you as a customer to go through wherever you're going, whether it is the general customers going through pj -- through pre-check -- the more we continuously this is what you should expect, this is what you need to do." and on the back end, charges for checked baggage, which you stated that this trend in more checked baggage creates stressed environments. how do you deal with the airlines, so that when some of

the airlines start checking for -- start charging for checked baggage, and we have people trying to carry on more and more, it seems as an observer to create more stress for screeners. how do you help with the airlines, so that we are going s, they are helping you reinforce how to get customers and educate customers on how they can be best prepared to get through the line? neffenger: thank you for that question. i'm still relatively new in the game, but i've met -- spent a lot of time over the last four months meeting with most -- both industry and ceos of the major u.s. airlines. i have been very encouraged with their openness and their response. they recognize some of these same challenges. i think there is a great deal of work we can do to tie ourselves more closely together. there is nobody with a higher vested interest in security of

the system than the people who are flying in the system. and i think that recognizing that, that gives you a lot of grounds -- we have the same objective in mind, even if we approach it from different motivations and different requirements. i'm encouraged that a number of airlines and travel associations that support them have begun to do more to advertise the trusted traveler programs, like global entry and pre-check. i think there is a lot we can do to signify the application procedures and to make them more common across the various programs that the government offers. i think that you can never market that enough, but i do believe that it really comes down to understanding that we are all in the same system together. we have different roles to play, but we can play those roles in a complementary fashion. the airlines have been working very hard to enforce the one plus one rule, meaning one carry-on bag and one handbag or briefcase. they are challenged as well. it is not my business to address

their business models, but i can tell you it is just a fact that a lot more stuff is arriving. it is packed more full of things. people have electronics in there. challenge for the screeners to deal with. they have to be very attentive. rep. desaulnier: you work with the airline industry. you new york -- you knew that it has the potential to put more pressure on the screeners when they were going to start charging for checked. neffenger: i think that would have been the expectation. rep. desaulnier: we have a mechanism for this going for? neffenger: both sides have to be aware of the impact of the decisions they make. i'm interested in the decisions and the business models of the airline industry and how it affects our business. because we support that business. rep. desaulnier: also, they may be transferring costs that you might pick up that they might normally expect to be part of their costs. neffenger: at a minimum to let them know what the consequence of that decision will be, that

it may indeed be to slower ,hroughput at checkpoints because we have to screen and clear these bags. rep. desaulnier: would there be some type of analysis that they are making more money by charging for checked bags, but it is costing us more money, either by putting more stress on the system, adding more people, working overtime? do you have a relationship with the revenue stream, should they compensate you? it shows there is a cost-benefit? neffenger: i would have to take that back for action. certainly, i want to know what the impact is on me, if it requires me to have additional resources. rep. desaulnier: thank you, mr. neffenger. chairman: the chair recognizes mr. russell from oklahoma. russell: thank you for being here. thank you for your long and

dedicated service. with regard to some of the issues on the screening partnership program, would you say that the partnerships have been better or worse performers than tsa, and what concerns do you have about that, if any? neffenger: in my initial look at the difference or the potential differences between private and thecreeners public, we have not seen any significant differences in performance, assuming they are trained appropriately. if i have any concern, is that we have a clear set of standards and expectations and those are consistently maintained across that program. but again, i don't see any evidence that there is any particular performance differences between them. mr. russell: thank you. and with regard to the turnover, what percentage of new hires would you say turnover within

one year or two years, just ballpark? neffenger: you know, i just saw these numbers. i will have to get you the exact number, but it's a fairly high turnover rate. it depends. part-time is different from full-time. in the full-time workforce, it's about 10%, i think. in the part-time workforce, i think it has been as high as 25%. rep. russell: you had mentioned some of the resources -- the reasons before. that has to be a drain on longtime personnel. you have the expense of the train up. these are dollars that are lost. how will you mitigate that in the future? neffenger: some of that goes back to the overarching discussion we had about connection to mission, connection to agency. as i think about what is it that would make somebody decide that this is not for them, aside from the odd individual that just says this is not what i thought i was signing up for --

it is typically, the thing i thought i was going to do, is that what the agency expects me to do? am i connected to the mission, to the agency? i have a future in the agency -- do i have a future in the agency? are there opportunities for training? some of these are beginning to be addressed by the establishment of a common training program and engagement, a sense of belonging to something larger than you. i think it continues with a clearly defined sense of progression in the organization and understanding what your opportunities are, incentivizing performance, understanding that if i perform well, i will be rewarded for it. and a feeling of engagement with my leadership. ssell: thank you. what concerns do you have with cargo screening? neffenger: cargo, as you know, has been a concern for some time. there have been a number of

procedures put in place for that. i think the question is recognition of the fact that this is a much larger system than just the checkpoint. even assuming you can get the checkpoint 100% right, there are many other potential vulnerabilities in the 80's and environment -- in aviation environment. we have a very robust set of requirements for cargo on domestic aircraft and cargo coming inbound to the u.s. on foreign and domestic carriers coming from outside the u.s. that reaches all the way back to the individuals that are actually packing the cargo container for shipment. it is an ongoing challenge. it's an ongoing threat. it's one you can't take your eyes off at any point. russell: on the tsa preprogram, a lot of issues have been addressed with that. i understand the benefits of having low risk travelers set aside for expedited screening.

you made it a point to, in your testimony today, to try to stop , whereaged inclusion people are benefiting from the program, but have no betting -- that he -- no vetting whatsoever. how much of the managed inclusion -- neffenger: re: speaking of the covert testing failures -- are you speaking of the covert testing failures? it is the case that, without getting into detail, as d,spector general roth note some of the people coming into the system were diverted into it. that could have contributed to some of the failures. i felt that the managed inclusion, as i said before, injected unacceptable risk into the system. i did not know anything about these individuals.

i thought they were best put back into standard screening until such time they presented themselves in a direct way for vetting into the program. rep. russell: thank you, mr. chairman, for your indulgence. chairman: the chair recognizes the gentlelady from new mexico. ms. grisham: thank you for your testimony today. mr. neffenger, i'm a big supporter and proponent of ofluative testing and review large employee organizations, because it can be very difficult , particularly when it is so broad-based. to get at the heart of what is occurring on a day-to-day basis. they createdte, undercover or anonymous anonymousons of --

investigations of long-term care. doesnfirmed that not only the authority exist, but it should be encouraged, and you should undertake these anonymous care evaluations. i appreciate very much that your leadership recognized that this might be a way to either confirm the data that you have, which, at the time suggested that things were operating fairly well, and you might have some complaints or an anomaly, or you would have the opposite, which is exactly what occurred here, is that you've identified the you got -- you have significant issues. in the course of your responses to questions and certainly in your testimony, and i appreciate that, you have accepted that there is a culture problem in the organization that needs to be addressed, and you have a 10 point plan. , evenally interested in implementing the plan, it is

very difficult, challenging to create in large organizations, i think, the kind of top to bottom, bottom to top culture shift. too often, people believe that it is a temporary investment. it is easier to go back to the way that it was, particularly getting random efforts, looking at one region, one area, one airport, one screening system versus another. it really depends on the leadership in that organization. what have you learned from this experience, that, a, we can help you with, in terms of really having a sustainable culture change shift with the leadership and rank-and-file employees? and what can we take from that and use it for other government entities that we have the same issues, secret service, the veterans administration, several others in federal government, that i think could really use this kind of approach? thank you.

there is a lot in that question. i think it is really important. you've hit on a number of the key concerns and thoughts that i've had with respect to this. you're absolutely right that it's a challenging -- it is challenging to do cultural change, but we have one great benefit. we have a really, really important mission. and it's a very defined and very specific mission. pointt's a huge rallying to begin cultural change, unlike the organization and mike have, you know, a couple of hundred different things to do. so i like that. it's a mission that people care passionately about. you can tie them to it. i never forget that everybody in this workforce raised their hand and took an oath of office. you can activate that. that's one great advantage you have. it's not enough. is not enough for me to say i want cultural change, because no one individual makes it happen, but is it for me to say because it has to start at the top. -- but it is important for me to say it because it has to start

at the top. i have to say that out loud. then you have to build some institutional structures that access support it. i mentioned a couple today. i think it is critical that i begin to do new hire training in a consistent, standardized, singular way. and i think that that will do great value in building kercher -- culture over time. i agree with that. and i think that's a great idea. but the accountability balance with incentivizing and creating long-term shifts, having an immediate shift that people believe is really taking place is the harder part, i think. i'm really interested to hear more about that. -- the othert the thing i did, a purely for the first time, i brought the entire leadership of the tsa -- the other thing i did, apparently for the first time ever, i brought the entire leadership of the tsa, all of the federal

security directors, the regional directors, my regional directors in overseas locations, together, about 175 people. for the first time in the history of tsa, we have done that. i spent two days with them. it was two days of connection with culture. we talked about how we collectively define the culture of the organization. rep. grisham: i'm out of time. i applaud your efforts. i would encourage you to balance accountability with incentivizing and creating a clear operating system, because i don't believe it is sustainable unless you do. thank you very much for your leadership. chairman: thank you. the chair recognizes mr. palmer. rep. palmer: we've had a lot of discussion about equivalent, technology -- equipment, technology, and personnel. the inspector general has stated that the tsa's problems come, i think, largely from a lack of

training. is that correct? i.g. roth: that's one aspect of it. rep. palmer: mr. neffenger, how do you plan to address the training issues? neffenger: we did immediately address the current results. we did what were called mission central training. it was an eight hour block of training across the entire workforce, starting with the frontline workforce. we do this in august and september. we trained every single screener. we are in the process of doing the same for the leadership of the organization. that was designed specifically to talk about what were the nature the failures, then to talk about systemically why those failures existed and how they existed across the organization. we have two go back and measure the effectiveness of the training. we are in the process of doing that now. we will do that going forward. that's a program we are putting in place on a routine basis now. we are going to do quarterly mission essential training. then we are looking at, across the organization at all levels,

what are the progressive levels --development training develop mental training and repeated training that has to be trainingevelopmental and repeated training that has to be done to identify problems before they are systemic, before you get into massive failures like we saw earlier? i think time will tell as to how effective it is, but i'm encouraged by some initial anecdotal results that show some significantly improve performance in those areas where we were recently tested. rep. palmer: is this your training for front-line people? neffenger: it is one aspect of that training. we used it to bring all of our trainers and during the month of july, turning -- to train them, and then pushed them out to on-the-job training for our workforce. what i would like to do at the federal law enforcement training center is move our new hire academy full-time to there

beginning in 2016 and then develop additional training opportunities and developmental training throughout someone's career in the tsa. rep. palmer: mr. roth and ms. grover, do you believe this basic training will help? is it going to get us where we need to be? i.g. roth: it absolutely will help, both in the sense of mission and community that community -- that mr. neffenger referenced, but also, some of the basics we found one being followed -- we found were not being followed. i'm a firm believer in training. that is one of our recommendations. we are gratified that the administrator is following through on that. bothgrover: it is necessary and critical to the development of an appropriate culture and enhancing knowledge support security effectiveness, but it is not sufficient. administrator neffenger mentioned the plan to follow-up to make sure the training itself was getting the desired results, and that is critical. mr. russell of

oklahoma asks a question about targeted security. i want to ask about checked bags. mr. neffenger are you aware -- mr. neffenger, are you aware of the leak that occurred earlier where the travel keys were released to the public? neffenger: think i -- i think you are referring to the photograph of the key that was published in a major newspaper? rep. palmer: are you aware they can reproduce that? neffenger: i am. rep. palmer: can you provide any link between your agency and the memorandum? neffenger: i will see if we have one. rep. palmer: my last question will be, how do you plan or will you be able to address this issue of baggage locks if these travel century keys have been compromised? neffenger: well, the first thing i would say, it is clearly a

compromise for potential for locking that bag outside of the aviation environment. those bags are still -- they go through screening and into the aviation. i don't see it as a threat to the aviation security system, but it is clearly a potential theft issue outside of the aviation environment. i think i need to see what the potential solution is from the , and thentry folks look to see what we can institute in the future. clearly, we have to address that as a problem. rep. palmer: that's in the context of my question, you have travelers were not using locks, because you use both partners -- you use both cutters -- you use boltcutters. they want to know their luggage is secure. chairman: the gentleman from wisconsin. >> thank you for coming over here. i know it's a tough job.

it's got a be a difficult thing to work. i assume you can work there for 30 years and never catch somebody who has no intent. intent, so you must wonder if what you're doing is worthwhile. by dealing with the public that does not consider this a wonderful thing -- you are dealing with a public that does not consider this a wonderful thing and are not happy to have you there. in the last five years, have you folks caught anybody who you not somebody who is axially slipping in a fingernail -- who was accidentally slipping in a fingernail clipper, but somebody who had bad intent in the last six or seven years, you feel? neffenger: within the entire system, yes. there is a security environment in which you enter when you first put your name into a reservation system. we have repeatedly identified people with connections to known or suspected terrorists over the years. rep. grothman: people you

believe who, at the airport, if you did not stop them, they were going to try and do a bad thing, not somebody on a terrorist watch list. somebody you believe, if you were not there, they would have done bad things. neffenger: we've had a few instances that i've been aware of. i hope the vast majority are deterred from trying in the first place. rep. grothman: right. you can forward to the committee later the examples where you really feel that you can't somebody who would have done the horrible thing if you had not happened. second question -- if you had not caught them. second question, and we had a hearing a while ago on this. what i took out of it is that, you know, maybe dogs would be a better way to go about this. there were slipups. have you done any work with dogs were used them as a trial -- dogs or used them as a trial? neffenger: we have quite a few canine teams deployed throughout

the aviation system. i'm in the process of moving some of those teams from what i consider to be smaller, lower risk airports to the large airports. i don't know the exact -- i think the number is somewhere around 112 teams. i think dogs are a very important additional element of security in the system. they provide a lot of capability, both for cargo screening as well as passenger screening. i'm a big proponent of the use of canine teams. rep. grothman: can you see the day when we use more dogs and less people? neffenger: i don't know that dogs will ever replace the people component. rep. grothman: not entirely. neffenger: but i think i can see a day for using more dogs, and we are doing that going forward. rep. grothman: would they ever release people -- replace people? rather than seeing a uniformed people, i see -- seeing eight uniformed people, ict to uniformed -- i see two

uniformed people and a dog? neffenger: we are still largely dealing with the exception of the machine, the same kind of sad when we have had for the past decade or more -- the same kind of check point we have had the past decade or more. i think we are looking at a very different checkpoint experience in the next five years. rep. grothman: a while back, there was a guy who felt it was a very top-heavy organization. you doing things to reduce the number -- are you doing things to reduce the number of administrative staff? neffenger: we have a total of about 6000 people in the tsa since spring of 2013. in the past two years, almost three years, we have reduced the workforce by about 200%. i think we will continue to do so. i have asked to hold steady for the coming year as we look at the impact of the elimination of managed inclusion and i look to

correct what i see to be systemic issues in the organization, then we will revisit the staffing standards following this year. more do see that there are efficiencies to be gained, always, in an organization. i think you have to look at that continuously. rep. grothman: ok. what do you pay your people starting? one of the guys or gals that i see, what is the compensation? neffenger: it varies by location. there is locality pay. it is roughly equivalent to the incoming level for -- rep. grothman: how much is it? neffenger: i think it runs somewhere around $28,000 to $30,000?- $28,000 to rep. grothman: do you have a hard time writing people? --fenger: it is a challenge

hard time finding people? neffenger: it is a challenge. rep. grothman: there any reason people 65 couldn't do that job neffenger: -- that job? neffenger: not at all. we have quite a few people that age. rep. grothman: i ran into someone who had been on your trouble list for a long peter -- period. he was not as mad about it as i would be. people called police on him. people came in with their guns drawn. if you look at the guy, you think, what? some little guy who lives in a town in wisconsin. how quickly does it take people to get off this list? how quickly should a mistake like this -=- neffenger: there is redress process that we partly manage its. -- manage. i'm not familiar with the specific. if i can get specifics, we can look at that case, but there is

a process. if you think you have been inaccurately placed on the list, there is a redress process on the list. it is a pretty fast process as i understand it, but it is a process. rep. grothman: along time for this guy. -- a long time for this guy. neffenger: i will certainly take a look if you have the details for me. chairman: thank you. miss maloney? maloney: tsa relies on many different pieces of equivalents to carry out its screening tasks. advanced imaging technology machines, walk through metal detectors, ask those of trace detection machines -- explosive trace detection machines, bottle liquid scanners, other pieces of equipment. the ig's office issued a report that said tsa is not overly managing the maintenance of its equipment -- not properly managing the maintenance of its screening equipment.

it says the tsa relies on self-reported data provided by maintenance contractors and does not validate the data to confirm that required preventive actions have been taken. tsa also does not validate the corrective maintenance data reported by his contractors. my question is to the inspector general. if tsa has not been validating the data reported by its contractors, can you be sure that all required maintenance has been performed and that its machines are operating correctly? they cannot., you accurately summarized what those reports are. the functional equivalent of giving your car to the mechanic but not checking to see whether or not they've changed the spark plugs. maloney: that is important. do any of the contractors as possible for the maintenance of tsa agreement have sole-source contracts? is it competitively bid or is it a sole-source contract? i.g. roth: my understanding is

it is competitively bid, but i think i need to get back to you. maloney: can you get back to me and the chairman and ranking member? have any contractors ever been penalized for failing to perform any type of maintenance task? i.g. roth: i'm not aware of any, but let me take that back and be sure of the answer. maloney: what recommendations did you make to improve these? neffenger: -- i.g. roth: we did make a number of recommendations regarding the process that tsa uses to verify the maintenance. that is still in process. we allow them time to be able to institute changes. i will get back to you with the specifics. oney: administrator neffenger, are you confident that tsa now has a systems in place to hold its contractors accountable for providing proper

maintenance of its equipment and are you confident tsa's equipment is being maintained and repaired properly? neffenger: thanks for that question. let me first say that i concur completely with the inspector general's findings, and i did find that we had -- not that the maintenance wasn't being done, but that we had no way to verify it was appropriate and done. we put the process in place to do so. we have to measure whether those processes are adequate to do that. i'm confident that certainly i get it and that the person i understand with it the importance of having an auditable follow-up trail to everything that is done to ensure that equipment is maintained to standards. maloney: i know you feel the responsibility you have to the american people. we know there are many who want to harm our citizens and that they tried to do it, for some reason, through the airplanes,

and they are continuing to break our system. i checked with the airlines in my area. they have incidents where they are trying to break through. having the oversight and the audit and making sure that this is happening is critically important. i look forward to you getting back to the committee, inspector general roth, on the answers that you needed to review more for us. i think they are important questions. i look forward to seeing what your response is. i think you for your public service -- i thank you for your public service. thank you for being here today. i yield back. chairman: i will finish with a round of summary questions here. ,irst of all, mr. administrator we have discussed who poses a risk. it is less than 1% of the travelers that are examined, of the 660 million.

is that still your position? put anfenger: i could not exact number on it. 20,000 toprobably 50,000 people on some sort of watchlist or no-fly list that we are looking to not board, who may pose a risk. but we are spending about 95% of our resources, again, on folks who pose no risk. you talked about where you are going, and i saw some of your report. i was pleased to see that you are looking to the future. here is my boarding pass. i have been to europe last year. i was there twice, once in italy and once in germany. type screenersa at the entry point. i have pictures of it. i'd be glad to show you. you go up into -- go up and put

your boarding pass on, and this guy will let you through. if it doesn't let you through, there is a person who would subject you to additional screening. that's almost commonplace now in europe in the domestic arena. maybe you saw that when you were there? neffenger: i did. chairman: we have people going through this, some of the dumbest things i've ever seen. let me borrow your cell phone. you put your cell phone down, and they let you through. but then you've got another tsa, if you don't have it on your electronic device, then you have someone who takes time and they go through and circle each thing. there are just things like that and where we are not -- can you name any countries other than bulgaria, romania, or lend -- poland, sort of in the more

sophisticated countries, that have all federal screening? neffenger: i will get back to you. chairman: there are none. it is -- israel. but it is under federal supervision. i have never said do away with tsa. i have said change your role, change the resources to connecting the dots to security. that's what's going to get us. every time we have been successful in stopping someone, it is connecting the dots. but again, you said it may be five years before we could get to this. this should be tomorrow. neffenger: actually, i think we will get to that much faster. chairman: and we should be and betting the information -- should be and betting -- should be embedding the information here. i saw that in nürnberg in 2003. the systems exists. we just keep falling further behind, adding more people.

if you aresaying training them, you are sending them back to basics. to a law enforcement training program? neffenger: no. it's at the federal law enforcement training center. it's not a law enforcement training program. chairman: we have to make it clear. some of my colleagues do not know that tsl personnel are not sworn personnel -- tsa personnel are not sworn personnel. they are screeners. neffenger: that's correct. chairman: you have this huge bureaucracy trying to recruit, and maybe you have gotten better. i have disclosed we are hiring above --pizza box ads and above discount gas pump advertisements for screeners. hopefully, that has stopped. you have actually trained more people than you employ. do you know that?

you have actually trained more people? they are gone. maturing -- your turnover has been in some places horrendous. granted, some markets are very difficult. we had equipment -- we have equipment, and this is about equipment. i heard about the failures to maintain, to operate, to train people for it, advanced imaging technology. the deployment is a disaster. how many machines do we have? 700 and what? neffenger: about 750 machines currently. chairman: how many airports? about 400 -- 300, 290 about airports that don't even have an ait machine. i'm mr. dumb terrorist. where am i going to go? ait is the best system we have,

but it can be thwarted. you have made some refinements to it, but personnel are human beings. they are going to fail. they're going to -- i will bet the staff a dollar they'll be back here, we'll do it next september we'll do the same hearing. we'll have testing and maybe you'll improve slightly but it'll still be a disaster. it's been a disaster in every classified hearing i've sat in. if it was publicly known people would scream for some change. i want to get you out of the personnel business, which is that huge, again, not law enforcement, but screening. you need to be in intelligence and connecting the dots and security. setting the protocols shall the standard. seeing who is not performing.

getting rid of them if it's a private firm that's operating. okay. so here's our ait's. we have 450 airports, at 160 locations. then you go to the locations when they put them out. it was mind boggling. and how are you going to change that? it cost hundreds of thousands of dollars for the equipment. then it cost the airports and you a fortune to put them in place. you go to some concourses and they got two or three of them in one concourse. it was never intended for that. it was intended to be a secondary screening device. and then in other concourses even at the national you go to, one of our airports and some of the concourses have none. so you have started having, god bless you, trying to change a mess. but even the deployment of that important machine has been a

disaster. when we spoke i asked you about reducing some of the overhead. you've got thousands of people in overhead. 46,000 screeners. it was up to 15,000 we found either within the 46,000 here in washington. one time there were 4,000 making 103 thousand dollars on average just within 20 miles of where we're sitting. some of those may be important responsibilities, but, again, we have to, a public-private screening partnership. i am a firm believer. they probably, well i know they perform a little better than you because i've had that tested. they came back and told me. you know what the response was when there was a fair, open test? they said private screening performed under federal supervision private screening under federal supervision performed statistically significantly better.

i don't care how polite your agents are. that's nice to have them polite. you've impressed some of the members. what i care is if they are able to deter a terrorist from getting through. and they are not law enforcement personnel. they are screening personnel. you've got your whole billions of dollars focused on people who don't pose a risk. we need to get away from that model. a member of congress mr. wahlberg who testified, he's got an i.d. card. sometimes they don't even recognize a federal i.d. ask you for a driver's license. but i've had hearings here on driver's licenses and i.d.'s that can and have been duplicated. that's one of the easiest things you can do. i can take and make you the fanciest boarding pass i'll challenge you, be glad to go

out and take one and i can get through any of your gates at national or anyplace else with st a little bit of work on a computer. so again, we've set up a system that is destined to fail. you'll be back here. maybe slight improvement, training some more folks, maybe a little bit better retention. back to the partnerships. in rochester, one of several dozen public-private partnerships i told you they had at one time 15 to 18 people. most of them making between 60 and a hundred and some thousand dollars. they have 1.1 million passengers. i went to canada. looked at similar operations. they have one federal person. i think you need a federal person, someone charged with the intelligence and conducting the oversight audit on daily basis and making certain it works. is there any hope of getting a reduction of some of the people we don't need at these programs

where we have the public/private partnership? >> as you know, we actually have reduced the number of oversight directly from the partnership but there is additional responsibility. there is a surface inspection in transportation so a number of those people are involved in compliance examinations and the surface examinations. >> and is there anything that can't be done through a contract? okay. two, three, four people at an airport like rochester. not 15 or 16. again, i know the game. you pack it so it makes it look like it costs more or as much for private screening under federal supervision. we'll have a report that be released soon and show some of the -- at least that costs less under that. not that i'm trying to do it on the cheap. they're just more efficient. i support federal wages. no change in that.

i support union membership. i put that in the bill in the beginning bill. in fact in the private screening in san francisco they had folks belonging to unions long before the most recent sign up of folks across the area. i have another question the chairman wants me to get in. will you let the committee know today or within the period we a p the record open, we want complete response on when you will -- you will finish and address all of the recommendations that the i.g. and g.a.o. have put forward. could you give us that today do you think, or do you want to give it to us for the record?

>> i'll give you a schedule for the record, but what i will tell you is what i told both the inspector general and director grover. and that is that i am committed to addressing all the remaining open recommendations as well as any that remain that are nonconcurs and getting those closed. >> if you can get the committee in the next what are you going to leave this open, 10 days? 10 days, without objection, so we'll leave it open for 10 days? no i'm not finished. i was just leaving it open and making certain to comply with your wishes, too. but in any event, 10 days and we would like that made part of the official record and exact a date -- again, i'm going to hold a subcommittee hearing if we don't hold a full one within a year, give you a chance. you're here and i love your attitude, i love your willingness to be open with the

committee. you've inherited one of the most difficult tasks. you're the what, sixth administrator i've dealt with them all. i think you're one of the most capable that we've been fortunate to have. we need to look at rerighting the ship on this whole security thing. get you out of the business that gives you the headaches. i know you'll go back and say mica is full of it and don't listen to him. as long as you keep trying to manage a $46,000 department you are going to have problems with recruiting, with training, with retaining, with managing. you will never get it right. i can assure you. not that it's your fault. you're dealing with human beings. and then using all of that resource to go after 99% of the people who don't pose a risk, not expediting their passage and not redirecting those resources toward the bad guys connecting the dots, security,

making certain that you set the standards. then as the inspector general and director grover have said, that you bear down on those that are not meeting the standards that you have. you kick their butts out. you fire them. you terminate their contract. that's your, i believe, your role. so again, welcome. isn't this great? you want to reconsider? no. you are a true hero to come forward. i have the greatest respect for you and what you're going to try to do. i'm trying to get you to see a year from now what you're going to face when you come back here and where we'll be. with that, thank you. and i want to yield to the ranking member. >> thank you very much, mr. chairman. i want to thank all of you for your patience. i know it has already been a long morning. i only have a few questions.

as all of you know, our nation as one standard for merchant mariners and employees who need access to secure areas of ports. it is called a quick card. use of the quick was required by the maritime transportation security act and each quisi bryan is issued by the t.s.a. administrator neffenger, i'm curious given your background with the coast guard which model do you think is better? should credentials for access to facilities and secure areas be issued by each individual facility or should they be issued by a national entity like t.s.a.? >> i don't know if i have a good, direct answer to that. by that i mean this. when you have a nationally issued i.d. card that creates a lot of challenge in managing it

and issuing it. and it introduces some concerns with respect to its viability across a large organization. that said, i think that both systems have -- can work effectively if the oversight is what it should be. i think as i look at the environment in the airports, airports would argue that they like the fact that the badges are different because it means you can't move from one airport to another and show up and get access. you have to have something that says your airport on it. i think we can do a lot more to ensure the security of those badges and to ensure the accountability of those badges as we move forward. there is an awful lot of information that came out of what the aviation security advisory committee study told about the way to manage and ensure the integrity of those badges going forward as well as

to look at the oversight of those. the inspector general has pointed out some important areas for us to consider so i don't really know which approach is better. i think both approaches can work very effectively but they need a lot of oversight no matter which way you take it. as you know there have been some challenges in the quick program as well. >> are you confident that full implementation of your plans will ensure t.s.a.'s screening systems will pass future cove ert tests by the inspector general and t.s.a.'s own combt testing teams? >> well, testing will tell. i'm confident we're on the right track. i hope it means we will see dramatic improvement in the future. i believe it will but i don't believe we can just declare it done and move forward. i think this is a continuous process and a continuous attention. this is one of these things that as i said before you can't just fix this and assume you've got it right.

this is -- what it's allowed us to do is see that this is an ongoing attention that needs throughout the entire life of the organization. there is no fixing it. there is addressing the challenges, learning from what you've addressed, testing yourself, learning from those testings, and that continuous improvement as we go forward. what i will tell you is that certainly for the duration of my tenure i will never take my focus off continuing to test this system, evaluating the processs and training we put in place, continuing to adjust them as we discover whether they work or don't work and then looking how to distribute the best practices across the whole system. that includes looking to our international partners for anything that they might be doing that can inform the way we do business. this global system relies on global standards and global consistency. >> now, as you've heard g.a.o. state today, t.s.a. has not always established performance

measures that clearly aligned with its goals. how will you know if you have altered the pervasive cultural problems in t.s.a.? and what performance metrics will confirm it? >> we took a look at the entire measurement system. i took a look at it. and essentially said, look. the current way we're measuring isn't leading us to improving the system. there's a readiness component. i want to know if the work force is ready. are they trained? do they know the mission? do they have the support of leadership? is there ongoing attention to that? i want to look at their performance and test them. did all that stuff work? did what i think about their readiness actually show itself in their performance? the system has to have same sort of measures. you need to know is the system ready meaning have we maintained it appropriately? can we verify we have maintained it appropriately? is it meeting the standards before we deploy it that we expect it to meet? all those other things that go

into does it work. then the second piece is how well does it perform when you plug it into the system? then you have to go back and you test that as well. so you're testing the people, the processes, and the technology. both its readiness to do its mission as well as the actual production of that mission. it's a continuous process. i will tell you that right now i get a report on a weekly basis directly to me on those measures. we have a ways to go yet. we're getting this organization used to a new way of thinking. it's measuring effectiveness, focusing on the security component, and the effectiveness of that, defining that mission in a very clear way. and then looking to see what we're learning as we're studying it. we've actually learned quite a bit already about system readiness. both in the work force as well as in the technology. and it's leading to some things that we have to do to improve that. on both scores. and it's also beginning to

fight point the way toward how we'll effectively measure performance including working with the inspector general and g.a.o. as we go forward. i see this as a very valuable partnership even recognizing they have to be independent and they're skeptical and i want them to stay that way but they give me valuable information about how my system is working. >> let me say this. one of the things i pushed with the coast guard, with the secret service, and the city police, is i've said that i want them to create an organization which is the elite of the elite. in other words, a feeling that we are the best. and that our standards are high. and i believe that when you have, you get there, the people who are caught up in the culture of made yock ritty will fall off because they don't feel like they belong, period. you won't have to fire them. they'll leave. some you may have to fire but most will just back off.

as i've heard the testimony today, one of the things that it just gnaws at me is the idea that we have now an agency that's willing to accept the recommendations and director grover i keep going back to some of the things you said about accepting these recommendations. nd then trying to do them. but we still have those gaps. as i was sitting here listening to all of this i was saying to myself, well maybe it's not just all the things you just said. but you have to add something else to it. i think that when you -- when we have recommendations, and then your agency looks at them and says, oh, yeah. we got to do this. yeah. we missed that. we fwot to do that. it may go back to that whole idea of trying to impress or get it done, but not concentrating on why we're doing it. you know, why that's important.

and some kind of way i think to get to the elite of the elite i think full understanding of why it is and the fact that bad things can happen and perhaps if you're not on guard they will. and i keep -- for some reason i keep going back to katrina. i think about katrina almost every day. because one of those situations, director grover, where we claimed we were ready. we couldn't even communicate across town. and like i said, when they said the rubber meets the road, we didn't have a road. our country is so much better than that. so i think one thing is leadership. another is metrics. i'm hoping that i'll talk to chairman chaffetz and he's been very open to accepting the model that we used in the coast guard subcommittee where we constantly brought folks back where uld actually see

we were going. one thing as you heard me say many times, a lot of times agencies, and i'm not saying you did this, but agencies will wait out a congress and then so there is no real accountability. going back to what you said ks director grover. you got to have accountability. one of the best ways is set deadlines. then come back and report. and it may be that you don't achieve every single thing you want to achieve but hopefully we can get in, you know, see our progress. by the way, i think when the agency sees its progress, that again helps them feel like the elite among the elite. finally, you know, i just thank all of you for working together. i thank you for having the attitude that you have. i think one of the biggest mistakes we make is sometimes we act like, you know, the inspector general and director grover, that we're on different teams. but what you're saying is we're

all on the same team trying to lift up the american people and keep them safe. that's the team we're on. that's our team. and so if i've got a member of the team that can see things that i can't see, and can bring them to my attention, and help me become better and again become the elite of the elite, i think that's what we ought to be about. i thank you for having that kind of attitude. because that's what's going to get us where we've got to go. i think that when -- i go back to what mr. goudie said a little earlier. i'll tell you, i have had nothing but good experiences with t.s.a. i mean, everywhere i go. ahn i know that we've got some great men and women working for that organization. and just at the same time inthey're also human. i think we have to constantly find those ways to keep it, you know, refreshing their skills and reminding them how

important their job is and how we appreciate them. because i can tell you when you got somebody, you got hundreds of people every day trying to rush to get to a flight, some of them are very upset. they got the kids, got the stroller. all of this and then they got to be checked. an sure that's just opportunity for people's frustrations to get out of hand, but yet i've seen over nd over again where t.s.a. officers have just been very patient, understanding, and trying to do the right thing at all times and at the same time protect us. again, i thank you all. we look forward to seeing you again. your testimony has been extremely meaningful and i think it can lead us into effectiveness and efficiency. i've often said that there's nothing like having motion, commotion, and emotion and no results. we have to have results.

nd i think we can get there. i think you've given us a road map to get there. >> i thank the members for participating. we've gone through all the membership and you all have been most accommodating. realize the task you have about a -- i particularly want to thank the inspector general and also the director. you have an important role with your oversight. the committee conducts some oversight. we rely on you and your independence in going forward and the goal here is to keep the american public safe to make certain that we don't have another 9/11 and that we do the the that we can with resources given to us by the taxpayers. that being said there being no further business before the committee i will mention to the staff that we will be

submitting to you all as witnesses additional questions in this interim time for a response. so we want you to know those responses will also be made part of the record. there being no further >> senate hearing on online consumer reviews in the ways companies are trying to censor them. after that the president's announcement on the future of the keystone pipeline. and live 7:00 a.m., washington journal. >> c-span has the best access to congress. watch live coverage of the house on c-span in the senate on c-span two. what is online or on your phone at c-span.org. listen live any time on our radio.

get behind the scenes access by following c-span and a reporter on twitter. stay with c-span, c-span radio and c-span.org or your -- for your best access to congress. >> the senate commerce committee held a hearing to examine online consumer reviews and get --gagses can customers processes they can use against customers. representatives from the national association of consumer advocates in the online review site of advisor. this is one hour 40 minutes. >> morning. this hearing comes to order. today we convene to exam a growing trend affecting consu consumers in the united states.

imagine you purchase something online and the product is not what you bargain for. you take to social media to post an account of your experience. you are threatened to immediately take down the review. buried in the fine print of the terms and conditions was a clause prohibiting you from posting a negative review. the sad reality is it is happening every day across the country. so-called non disparagement or gag clauses are forced on consumers and used to intimidate them. they are aagainst the people. we focus on increasing broadband adoption and increase the potential of the internet. but stifling contract terms

undermine this. we have the ability to free information with whoever you like. what good is information if it has been sanitized to remove criticism. the practice is about a larger entity about constructive critiism. c online review sites and social media have given american consumers a tremendous amount of power. consumers place high val ley -- value on the experience of other consumers. do some consumers abuse the internet with false reviews sometimes? sure. but they have the ability to sue for defamation. businesses should be able to offset phony reviews with positive assessments from happy

customers. there are a number of growing businesses blocking through gag causes rather than responding negative criticism. we are joined by jan palmer who will share her experience against a company that sought a $3500 penalty because she told the truth about the service. they were able to challenge the abuse in court and persevere. they are far alone from their experience. a dentist included a clause in her contract and a report to anything the patient wrote about a dentist. when a patient posted online review about invoicing the company demanded it be taken down. the patient sued the dentist is the court awarded the patient

nearly $5,000. another case, a consumer who didn't receive her order from an online retailer informed the company she would report the matter to her credit card company. the company demanded the consumer pay $250 for violations of the fine print terms of sale which prevents a company from threatening to make a public statement about a retailer. the consumer filled a complaint and the court ultimately found in the consumer's favor. going a step forward, in a wedding contract one hotel went as far as to inform newlyweds they could be informed if any guest violated a gag clause by leaving a negative review. after this gag clause was reported in the press the company changed their mind.

our bill empowers the federal commission to enforce against the provisions. the consumer free gag act guarantees provisions against this. i am looking forward to moving the pro-consumer legislation through the committee. we have a great panel here today.

>> companies want to muddle consumers. and these companies are using their size and unequal bargaining power to force consumers to sign these take-it-or-leave-it contracts. sometimes they are just online pop up items that consumer clicks on to purchase a good or service on the internet. almost no one reads them but they can have major consequences.

you are bound by the fine print that lawyers are good at drafting and the idea that some companies are suing or threatening to sue customers for truthfully reviewing their consumer experience because of the despairage clauses in the content in the fine print is appalling. in a state like mine, florida, that is dependented on tourism, we want visitors to their their

experience. -- dependent -- businesses that do a good job should be rewarded with good comments and those who do not ought to be punished by telling the truth. they are sharing their opinion with other consumers. i think this hearing is timely, mr. chairman, because of this issue in your bill brings up also a related issue that needs to be discussed. just a few weeks ago, the los angeles times reported that fiat-chrysler was requiring consumers who wanted to receive on a car, they must in order to get that, sign a mandatory

arbstration clause as part of the contract. so if the car is defective and kills or injurs that consumer, as was the case with toyota's sudden acceleration, or gm's faulty ignition switches, or tecata's exploding airbags you cannot seek re-dress because of the take it or leave it arbstration clause. this type of provision is outrageous. -- arbitration -- and beyond the automakers themselves, many dealers are trying to use these arbitration provisions to shield themselves.

theories these clauses are just another way to avoid accountability by silencing consumers. so yes, consumers ought to be able to write a negative review, consumers should have the ability to seek justice in a court of law when businesses fail to hold up their end of the bargain. cannot continue to let people get off scott free. >> thank you, senator nelson. i want to add a couple letters of support for legislation. this is from angie hilary clinton -- angie hicks from

angie's list. the internet association applauds today's hearing on the bipartisan bill introduced by several colleagues. american consumer institute, institute for liberty, r-street has a letter of support, and another from a coalition that includes yelp and public knowledge and real self among many others. >> we have on the left, the senior vise president for global product at trip ad visor. the president of information and technology foundation. jennifer palmer who is the one who -- one of the named

plaintiffs in the case. welcome and great tov you. we will start with mr. medrows and please proceed with your foment. confine it as close to five minutes as possible. >> thank for inviting me to testify on what we believe is a an important topic. we very much appreciate your review of infrethe freedom act. i lead a team on trip advisor that is responsible for the collection, moderation, and

display of travelers reviews. for those who don't recall what it is like to plan and book a trip prior to the advent of the internet let's rewind. the infrequent nature of travel, and importance we place on vacation was risky. you had to research and plan the trip on your own calling multiple airlines and hotels to check availability, or rely on a travel agent looking at b brochures. the internet has improved this decision.

a poplar tactic among businesses is to use contractual leverage to silence critics. this harms reviews, those seeking transparency through other's experience, and those businesses playing by the rules. trip advisor host more than 250 million reviews covering more than 5 million visitors. we encourage members to share opinions, good or bad, on experiences at hotels, restaurants and attractions and strongly believe in their right to do so. we give all businesses the right to respond to reviews in order to insure consumers are given both sides of the story. we are far from the only source of consumer reviews. americans are returning to websites to educate themselves and purchasing decision on everything from what doctor to visit to whom they should hire to remodel their kitchen.

70% of shoppers rely on online reviews more making a purchase. in the uk, 54% of adults rely on reviews and 70% of online shoppers found them to be more important than anything else. consumer reviews are a critical part of today's marketplace. consumer reviews are so open. this is a means to get critical reviews removed or stop them from getting submitted. even those who read the clauses lack the leverage to have them

reviewed. the intention behind the clauses is always the same: to gag negative opinions. the exact language varies. examples we have received from travelers include since bad reviews are detrimental we place a fine. if the hotel receives a poor review and is out of context or control of the hotel management a fine of $300 is charged on the credit card on file. dealing with companies and individua individuals. trip advisor has taken to

warning travelers of the behavior and this is not a perfect solution and would be improved on the chairman's review act. this goes against everything we stand for. just as the consumer can tell family and friends about the business in offline world, she has the right to share the experience online allowing businesses and other customers to learn and benefit there from. whether -- when a business has a gag orderer, everyone is harmed. even the business, doing the silence is harmed and loses the opportunity to gain from the experience of others. these types of clauses serve no purpose. we look forward to working with you and the entire committee ensure american consumers are

not prohibited from sharing their experience online or on internet. >> mr. nelson. >> thank you. i appreciate being able to come before you to talk about the non-disparagement clauses. the information technology foundation is focused on policies to enable the internet economy to thrive. i want to raise three issues. the first is about economic theories and the economics behind this. there is long been a view in economics that are over the

situation. when you go to a hotel, you don't know anything about the hotel other than what you see but the hotel knows everything. this market is asymetric information. they are under-performing economic welfare for everyone. consumers and the overall economy. economic research found that if markets don't perform effectively, if buyers can't accurately assess the product or value of the service before buying it. you go to a hotel and have no idea you cannot make an informed decision. second, if an incentive exist for the seller to pass off a low quality service as a high quality one, clearly as the example shown that incentive exist for some sellers. where they have a good time

improving the probability. and fourth there is a deficiency of public quality assurance. it is hard to find independent asse assessment of quality. that is why online rating tools are so important. they are essentially the tool to solve this age old problem that bedevilled economic problems. they solve the problem because they provide a public quality assurance of that and let people know why and when there is poor quality. the second point is the issue of preemption.

in many of these cases, trip advisor hotel reviews in florida, many are non-florida residents. a state might say we want to protect businesses not allowing this but they are hurting consumers all around because consumers everywhere use and contribute to these. it is a clear justification for federal action. the third would be what about the possible harms to businesses where there is a bad review. i think it has been pointed out that this bill would not prohibit companies from already using existing legal tools for defamation.

it actually turns out that gets them better results with consumers because consumers believe the manager of the company is taking consumer complaints seriously and they are more likely to trust this. this was a study, for example, recently about hotels and found that regardless of whether reviews were neutral or negative, they began to receive higher ratings from guest after hotel managers started to respond to feedback. i have heard that from hotel managers when we did a study on hotels. they go out now and tell the managers they should respond online because it brings back trust. so i don't think we should worry too much about that.

when there are cases of defamation and lies they are other methods. we support this legislation and believe it is very important online. thank you. >> next up is ms. palmer. share your story. >> chairman thune, ranking member nelson, and members of the committee, thank you for inviting me to testify. my family's experience with being bullied over a negative review shows why we need this legislation. my husband ordered a couple trinkets that came to less than $20. they failed to arrive and we contacted the company from phone and e-mail. we never received a call but got an e-mail saying payment was

never received. i posted a review and we moved on. john got an e-mail from clear gear demanding my review be removed within 24 hours we're we would be fined $3500 from the cause that quote banned taking action that negatively impacts clear gear didn't exist when we ordered the item and the fact john didn't write the review didn't matter. the clause didn't appear until three years after my review was post-ed. we were shocked and scared. i spent hours researching how to remove the review but the website had a policy of not removing them. john spent time explaining this couldn't be removed, the non

disparage clause didn't exist and he didn't write the review. they responded writing they would send us to collection for $3500. three months later, it appeared on his credit report. we immediately disputed the debt with the credit burrows with no success. clear gear e-mailed us admitting they had confirmed the debt as valid. we cannot afford for hire an attorney. it would me be more than 18 months before john's credit was clean again. we only use financing for large purchases like cars in 2008 and 2011, our house in 2009 and medical bills not covered by insurance. this caused us constant anxiety, fear and humilitation when people asked who is clear gear and why do you owe them $3500.

because of the problems we were denied a credit card, delayed on a loan and deterred from buying a new home that would move us closer to workplaces. the worst came when we were denied emergency financing to replace a broken furnace. we were desperate wrapping our three year old son in blankets with temperatures dropping near freezing. i was terrified and too afraid to tell anyone for fear social services could take him away. we had to cut every expense and we were able to buy a basic furnace with cash at the end of the month. i contacted a reportt in salt lake city who did a segment on our plight and got us in contact with public citizen who represented us suing clear gear. they helped clear up john's credit and we won a default judgment. they never bothered to even show

up. throughout the ordeal, we only wanted two things. all traces of the actions be cleared from john's credit and to do everything we could to insure nobody else ever had to experience the nightmare we encountered. we want congress to ban this disparadi despa despadi despa despadi despa despairage clause. we are not the only ones who fell guilty to this. this needs to stop. companies should earn reputation honestly with good products and services.

i urge you to pass a bill that inhibits the causes and provides robust enforcement of the law. >> thank you for sharing that and be willing to share the story with us. >> i appreciate the opportunity to talk about how congress can protect consumer reviews. consumers reviews are important to the economy. mark markets are stronger when consumers share experiences and guide consumers toward the best experience and away from poor

ones. some businesses try to suppress reviews from customers. these efforts are not legit. the freedom act insures every consu consu consumer can add their voice to the discourse. there are precedent to support existing laws protect consumers but i will explore two reasons why i think we need the consumer review act. it is not clear if courts will enforce anti review clauses. i use that to describe what other people are calling gag contracts or non-disparage clauses. many judges will refuse to enforce the clauses because of the public policy or reason but judges also don't like to override contractual provisions

so they are not guarantee to failed. i want to talk about a vacation rental contract that required tenants to agree they would not quote use blogs or websites for complaints anonymously or not. we don't know how many consumers were prepared by the clause from sharing their experience but we do know that two tenants did pose public reviews of the vacation rental. the court held reviews were not defamitory but they may have breached the contract. this means the anti-review clauses exposed the tenants from liability for sharing the review. the consumer liability ability

will allow vacation tenant and other customers have legal certainty to speak up. we also need this act because businesses are looking at ways to shape their online appearance. anti review clauses will keep proliferating unless banned. the experience of the health care industry illustrates how that might happen. in the late 2000 a company called medical justice sold form contracts to doctors and health care professionals that contained anti-review clauses. the sales pitch to doctors and health care professionals was

elge elgee elgent. i would guess over a million americans signed such provisions. medical justice changed their position in 2011 and told consumers to stop using the form even in 2015 it can be hard to find robust numbers of patient reviews. the health care industry adoption of care may seem to be extreme, we are likely to see affects dominated by other businesses and service providers. these self identities are linked to their professional reputation. negative feedback about their business feels like it reflects upon them as an individual. if a vacation tenant didn't like the decor the landlord may take that against her taste in

decorating. small business owners and professional service providers will be attracted to anti review clauses to prevent the public ego blows. therefore without the consumer review freedom act other industries will embrace the clauses like the health care industry did and we as consumers will be poor for this. consumer reviews will be thrilled. i want to thank you for your work on this bill and the opportunity to share my views. >> thank you very much. >> thank you, mr. chairman thune, ranking member nelson and members of the committee. this morning i would like to make three points. no one has been paying attention over the decades as consumer rights have been stripped away where unseen forecast of contracts have been disparaged by the growth of the clauses. the idea behind the legislation is a good one and fits intro a

long history of legislation action designed not only to protect consumers but our market economy. and as of now, we are unable to support this bill because it seeks to limit the enforcement rights of state and federal officials. when i see non-disparagement clauses i see the logical conclusion of a decades long corporate effort to strip consumers of another fundamental right. consumers are typically required to wave all sorts of rights including the right to seek relief in the justice system and now the right to even speak. the use of non-negotiable contracts, people have been stripped of the 7th amendment right of a jury trial and why should we be surprised businesses want to do the same to consumers first amendment right? i would be the clauses that wave

fundamental rights would be unconstitutional.

we are passed a wide variety of laws on this ground, the ftc act states the laws were created with the understanding our communicator economy wouldn't function properly if we had unfair trade practice. federal and state regimes exist because it is based on the fact consumers make informed decisions. the fair credit reporting act was passed the full recognition that credit decisions made on the base of faulty information undermine the vitality of the consumer economy. the idea to ban non disparagement clauses stands under the market protection statutes. we only function properly when unfair practs is exposed.

it is made available for consumers to use and ignore in the decision-making progress. while protections are essential for consumer marketplace to function, the mere passage is not enough to insure the rule of law is complied with. strong enforcement of the statutes by regulators is essential to have the law in affect. with limited and ever declining budgets and staff these important public servants have sought ways to maximize ability to protect state citizens and economy. they are working across statelines in a bipartisan matter and that is essential to getting justice far beyond what is possible if the work was

limited. similarly the partnership of some attorney generals have formed with experience and capable private attorneys has led to a measure of justice and consumer relief otherwise not attainable. if we want attorney generals to enforce the law, congress shouldn't limit the state officials from choosing how they best and protect consumers in their own state. we support the idea behind s-244. there is no place in the american economy for denying consumers to right to speak freely about their experience in the marketplace. for a consumer marketplace statue be effective it must be enforceable. it limits regulators from using all of the enforcement tools we cannot support it. if this provision is removed we would offer full support.

>> thank you. we appreciate your comments on the legislation. i will start and ybt i want to ask you, we have been through a harrowing ordeal i would say before winning in court. most people would have given up but you persisted and kept fighting. >> the only thing we wanted to happen was for my husband's credit to be cleaned so we could move on with our lives. we really did want to make sure this never happened to anybody

else ever again. we never dreamed it would come this far. i am pleased you are looking at pushing through legislation on the government level. >> you testified one of the purposes of the gag clauses is to bully and intimidate consumers into removing negative reviews. you testified how clear gear's demand for $3500 shocked and scared you. i guess i am wondering if you experience with clear gear has given you pause about posting reviews for other products? >> absolutely not.

i continue to post reviews for companies that give wonderful service and great products to let other consumers know you should by from this company. and for companies that fell short of the mark and didn't fall through. >> i guess after what you experienced with clear gear it cannot get worse. >> i would hope not. >> amazon recently sued a number of companies that allegedly facilitate fake reviews online on the other side. do you see other large internet companies taking measures to cleanup online reviews to make sure the consumers are getting accurate and authentic information? >> absolutely. let me first thank you for inviting us and pushing this

legislation forward. we think it is incredibly important. without a doubt, we see businesses in the hospitality industry attempt to silence critics of their services and this plays out across a number of other industries you mentioned. amazon case we have seen, we have seen it with yelp in trying to push reviewers to remove comments and reduce the severity of their comments or to outright bury those comments with other content and more positive comments. >> professor, i thought you made a great point in your testimony when discussing how consumer reviews make markets stronger and more efficient because they help guide consumers to the best products or services.

to what degree do you think gag clauses maybe distorting the market and do you think most consumers are aware of what is going on? >> i think the contract clauses are only a small part of a larger problem. there are disincentives to share opinions about the businesses they deal with. each of them are a friction point or wedge in their willingness to share. ms. palmer here said proudly that she hasn't been bullied off the internet but most consumers don't have the confidence she has. gag clauses are just one way businesses can threaten consumers to get them to not only stifle themselves but remove the legit reviews. other tools is threatening defamation and saying we will sue you and take you to court if you don't remove it and that is why i would call your attention

to the things like the federal anti-slap law that has been considered. that is another tool to protect consumers from having reviews driven off the internet. >> my time is expired. i will turn to senator nelson. >> ms. palmer, i am sorry you had to go through this experience. was it when you went to the t station and it started getting publicity, is that when you decided to go into court because you are listed as the plaintiff in palmer versus clear gear? >> we had been seeking legal help before going to the media. i had contacted several lawyers, done a lot of legal research online to find out what my options were. for all of the lawyers i spoke to and said do we have a case, i said yes, we do. i said can you represent us, and

they said oh, no, we are not touching that with a ten-foot pole. it was shady and big and most didn't want to touch it. it wasn't until after we spoke to the media, i was hoping to find a lawyer that was willing to step forward and that is when public citizen came forward and said we can help you, we want to help you and we have the means and resources to do so. >> well that is good news. mr. medrose, i want to look other the side. tell us about evidence of bad actors trying to take advantage of businesses by threatening to post a false-negative complaint. >> there are certainly some instances where consumers threaten a business with a negative review, threaten to share their experience online,

and we encourage businesses to monitor properties for the instance of negative reviews. in the vast majority of negative reviews they never appear are and empty threats. second, one of the tenants of trip advisor is to allow businesses to respond to any consumer review. we believe that transparency will solve this problem. consumers write reviews, businesses get to respond, and future consumers get to read responses, the back and forth between the two parties, and make their own decision and weigh their own believes about if this is the right decision to visit. this isn't a large problem. >> you encourage the businesses if there is a false review to contact you.

would this legislation prevent what i can tell you is that i don't believe that it will prevent businesses from interacting with trip advisor and asking reviews to be reviewed. we do employ an entire staff and look at every review where an owner or another member of the community flags it as inappropriate against our guidelines or perhaps irrelevant. >> at the end of the day, i think what we want is the access to the courts for whoever is the agreed party. the consumer or the business. and in the case of ms. palmer, apparently it was her access to the court.

should we be doing something to protect consumers from more than just the non-despanon-disparage causes? >> the way consumers can seek readdress is through our public court system. a lot of stories and bad damages done, if they don't have access, ms. palmer's story is compelling and the press picked it up.

sometimes you need to go to court and publicize this. what fiat did is happening in every place. it has gotten sanctions. with fiat, there is a reward for signing it away. most people are signing without knowing about it. it has been in clauses, shrink wrap, arbitration clauses are everyone in the economy. there is a dual justice system where consumers don't have access to the courts wherever they enter into any agreement with any type of business. >> this committee has seen a proliferation of these things recently. fiat is just one example. the gm ignition switches and so forth.

>> thank you for your comments. these things that are subject to mandtory arbstration or adhesion, you would really lose a lot of your ability. we have caught off the aggrieve or the agriever into the court. >> the bill does, by the way, say defamation cases can proceed. we don't do anything to impinge on that right. senator mccaskill and blunt are basking in the kansas city royal win. >> we had hardly anyone in the party show up.

>> it begs the question why are you here? >> there are not many people in kansas. >> i tried to have a bet with the senator from new york and the offer was i would offer kansas city bbq if you agreed not to talk for 45 minutes. we accepted your bet. many missourians have loyalty. and finally, we are wearing blue and you are wearing red. >> i will not go into the history of the teams in kansas city, missouri. but i will be glad to acknowledge we are welcoming all of the fans from kansas. >> she is a loyal cardinal fan. >> i am. you are up. >> thank you very much. i am pleased senator thune has, in an effort to get a bill we can agree on, agreed to take out the provision that limits to

tools available to attorney general as it relates to contingency fees. i am assuming there was an agreement with the lawyers that ultimately represented you in this case? >> unfortunately, public citizen as a non-profit was kind enough to work with us pro-bono since we could not afford legal representsation on the scale we needed -- representation -- others said they would not touch it and i said what you have wrote a seize and desist letter or helped a little they were offering thousands. >> of course. it is hard for an individual to get to court unless there is a contingency fee agreement. >> even with that they said we want a retainer. and we said if we don't have $3500 to pay clear gear we don't

have it for you. >> i will admit i am a chicago cubs fan so i am a little disappointed but congrats. consumer statutes, particularly the fair credit reporting act, has fee shifting provisions. attorneys who take a case like the fair credit reporting case would not have to charge ms. palmer. they only get paid if they win that case and the court will award them damages after they successf successfully win the case. it is a little different from cont contingency. this provides access to consumers when they have been damaged like ms. palmer. >> so did public citizen recover the cost even of their litigation? >> we are still working on tracking clear gear down to

recover any cost. >> so you haven't collected yet? >> no, ma'am. >> are they still in business? >> as far as i know, yes. >> ugh. that drives me crazy. >> it should be noted that in the judgment award the judge did award us our settlement and tact on the lawyers' fees for public citizen as well. so if and when anything every is collected -- which is the fee shifting he was referring to? >> right. >> but if you lost, they would not have gotten anything. >> true. >> and that was always an issue/fear. however, with any of the other lawyers they were not interested on the contingency bases. they wanted a retainer. >> that is one of the problems where we try to fund lawsuits where there is a complaint but

the damages don't appear to be enough to warrant the risk of the lawyer taking it on. that is one of the advantages these big companies have. they know it is small enough. there is two things a lawyer has to have to bring a lawsuit. one is liability and the second is damages. and how large the damages are is relevant to whether or not they want to take on the costly risk of going forward with the lawsuit which does even the playing field, i think in some ways, too much in favor of the big guys. let me talk to you about the use of service. i know who drafts this stuff. they are lawyers. this is -- how many people are

reading this that go on trip ad visors? >> i would imagine very few. >> so what is the point? if we know nobody is reading it why are we not working at knack making this -- have you thought about making a stab of making the terms of service as forthcoming and clear as the rest of your website? >> we would welcome making privacy clear. we take it seriously in giving us the ability to moderate our content according to our guidelines. i believe that in the case of a